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Flextronics International Ltd (NAS:FLEX)
Beneish M-Score
-2.62 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

Flextronics International Ltd has a M-score of -2.62 suggests that the company is not a manipulator.

FLEX' s 10-Year Beneish M-Score Range
Min: -6.22   Max: 0.01
Current: -2.62

-6.22
0.01

During the past 13 years, the highest Beneish M-Score of Flextronics International Ltd was 0.01. The lowest was -6.22. And the median was -2.58.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of Flextronics International Ltd for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 0.8651+0.528 * 0.9334+0.404 * 1.0998+0.892 * 1.0015+0.115 * 0.8219
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9639+4.679 * -0.004-0.327 * 0.9688
=-2.62

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $2,338 Mil.
Revenue was 5951.6 + 7025.054 + 6528.517 + 6642.745 = $26,148 Mil.
Gross Profit was 378.817 + 408.657 + 377.081 + 380.785 = $1,545 Mil.
Total Current Assets was $8,741 Mil.
Total Assets was $11,666 Mil.
Property, Plant and Equipment(Net PPE) was $2,092 Mil.
Depreciation, Depletion and Amortization(DDA) was $540 Mil.
Selling, General & Admin. Expense(SGA) was $844 Mil.
Total Current Liabilities was $6,756 Mil.
Long-Term Debt was $2,038 Mil.
Net Income was 135.112 + 152.899 + 138.903 + 173.887 = $601 Mil.
Non Operating Income was -94.759 + -5.067 + -2.584 + -44.009 = $-146 Mil.
Cash Flow from Operations was 124.61 + 363.179 + 387.414 + -81.169 = $794 Mil.
Accounts Receivable was $2,698 Mil.
Revenue was 6723.934 + 7183.442 + 6410.106 + 5791.125 = $26,109 Mil.
Gross Profit was 362.144 + 398.619 + 368.423 + 311.035 = $1,440 Mil.
Total Current Assets was $9,400 Mil.
Total Assets was $12,500 Mil.
Property, Plant and Equipment(Net PPE) was $2,289 Mil.
Depreciation, Depletion and Amortization(DDA) was $465 Mil.
Selling, General & Admin. Expense(SGA) was $875 Mil.
Total Current Liabilities was $7,657 Mil.
Long-Term Debt was $2,070 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(2337.515 / 26147.916) / (2697.985 / 26108.607)
=0.08939584 / 0.103337
=0.8651

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(408.657 / 26108.607) / (378.817 / 26147.916)
=0.05516269 / 0.05909993
=0.9334

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (8740.9 + 2092.167) / 11665.624) / (1 - (9400.326 + 2288.656) / 12500.15)
=0.07136841 / 0.06489266
=1.0998

4. SGI = Sales Growth Index

Ratio of sales in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=26147.916 / 26108.607
=1.0015

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI=(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) / (Depreciation_t / (Depreciaton_t + PPE_t))
=(464.543 / (464.543 + 2288.656)) / (540.49 / (540.49 + 2092.167))
=0.16872845 / 0.2053021
=0.8219

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI=(SGA_t / Sales_t) / (SGA_t-1 /Sales_t-1)
=(844.473 / 26147.916) / (874.796 / 26108.607)
=0.032296 / 0.03350604
=0.9639

7. LVGI = Leverage Index

The ratio of total debt to total assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((2037.571 + 6756.223) / 11665.624) / ((2070.02 + 7656.687) / 12500.15)
=0.75382114 / 0.77812722
=0.9688

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(600.801 - -146.419 - 794.034) / 11665.624
=-0.004

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

Flextronics International Ltd has a M-score of -2.62 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Flextronics International Ltd Annual Data

Mar06Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14Mar15
DSRI 0.86170.95081.38450.5811.35120.9140.95611.01371.15320.8651
GMI 1.21090.99281.15431.03180.81930.90711.07611.04550.8970.9334
AQI 0.98750.94280.89740.26810.54170.75021.0181.59061.06471.0998
SGI 0.97191.23321.46171.1230.77911.17971.03170.80321.10771.0015
DEPI 0.92951.13440.77690.97890.91511.38680.89870.97211.22460.8219
SGAI 0.90820.9571.00841.08031.00580.8861.06091.14230.98070.9639
LVGI 0.97920.97511.14011.46190.96970.99060.98530.9661.05340.9688
TATA -0.0410.0125-0.083-0.6506-0.0733-0.023-0.0268-0.0853-0.0727-0.012
M-score -2.70-2.25-2.14-6.25-2.98-2.59-2.59-2.80-2.60-2.66

Flextronics International Ltd Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 1.141.01411.14021.09831.07361.15321.01240.91990.88040.8651
GMI 0.96441.04511.10661.19011.04530.8970.85510.84670.90890.9334
AQI 1.88011.59061.22731.12110.92391.06471.15131.24681.20151.0998
SGI 0.83240.80290.84050.90881.00151.10771.15291.14641.09081.0015
DEPI 0.9090.97210.98130.99551.23861.22461.17241.03740.84690.8219
SGAI 1.11791.14161.16541.13571.10070.98070.89010.85380.87080.9639
LVGI 0.94660.9661.01371.05451.0571.05341.00180.97790.97470.9688
TATA -0.061-0.0833-0.1015-0.0698-0.0777-0.0736-0.0394-0.0575-0.0221-0.004
M-score -2.46-2.79-2.86-2.69-2.79-2.60-2.49-2.64-2.57-2.62
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